Will focus on core beverage can business
UK packaging company Rexam is to sell the pharmaceutical devices and prescription retail packaging divisions of its Healthcare business to Montagu Private Equity for US$805m in cash.
Rexam intends to return about £450m ($740m) to shareholders from the proceeds of the sale.
In future, the company will concentrate on its core beverage can business.
The firm's Healthcare business has three divisions: pharmaceutical devices, prescription retail packaging and closures and containers.
Rexam is in discussions regarding the sale of closures and containers and says it will provide an update in due course.
The deal is subject to consultation with various European works councils and is conditional on the necessary regulatory approvals. It is expected to complete around the middle of this year.
The sale of the Healthcare business is part of our long term strategy to maximise shareholder value
In 2012, Rexam's pharmaceutical devices and prescription retail packaging divisions employed about 1,500 people and had sales of approximately £250m and underlying operating profit of £43m. These divisions account for about 85% of total Healthcare EBITDA.
Graham Chipchase, Rexam's Chief Executive said: 'The sale of the Healthcare business is part of our long term strategy to maximise shareholder value. The pharmaceutical devices and prescription retail packaging divisions represent the majority of the value of our Healthcare business.
Following the sale of Healthcare, we will be a focused beverage cans business with a strong financial position. Our strategy is to balance growth and returns and we will continue to pursue selective investment opportunities in beverage cans in higher growth markets.'